Monopolies are bad. The lack of competition leads to inflated prices, reduced innovation, and inefficiencies. Right? Peter Thiel, cofounder of PayPal (“don” of the PayPal mafia) and author of Zero to One, takes the contrarian view that monopolies can be a good thing. Monopolies like Google have greater freedom to direct energy and resources to other pursuits, such as their amazing culture brimming with perks, because they aren’t locked in a desperate competition for a share of the market. And it’s hard to imagine how Google’s “20% time” rule, in which employees are allowed to spend one day a week on projects of their own choosing, could reduce innovation. When the big, bad alpha wolf is fat and happy, perhaps he can afford to be generous and playful.
Thiel’s argument about monopolies puts me in mind of Maslow’s hierarchy of needs, which can be useful way of thinking about organizational behavior as well. If you aren’t familiar with this framework, it asserts that we have to meet more basic needs, such as for food, shelter, and safety, before we can begin to address higher-order needs, such as self-esteem, belonging, or growth. With freedom from worrying about scrambling for resources or engaging in turf battles, people can focus on doing their jobs well. Does this sound familiar? CEO Dan Price of Gravity Payments has recently been making headlines for taking a 90% pay cut in order to give his employees a hefty raise. As one employee put it, “This gives us so much freedom to just do our jobs and not have to worry about money.”
I think these two stories can tell us something about how we can help our people bring their best to their jobs. When people have to fight like wolves over resources – whether for a piece of the budgetary pie, position power, or recognition and rewards – that’s going to distract them from their jobs because it takes time and energy and can lead to interpersonal conflict. When people have safety concerns on the job, or can’t set aside worries about financial or health woes – those issues will likewise eat up precious cognitive and emotional resources that we would rather they brought to bear on organizational problems. How can we help people “clear their margins” so they can focus their energy where it matters?
Sure, Google has a lot of perks, but they aren’t just throwing money around willy nilly with their free food, gyms, and massages. They are using those fat, happy resources very strategically. Google is a great place to work because it is filled with great people who have the distinct sense that the organization cares about them as people, and because these crazy perks allow them to forge and strengthen relationships with other employees. The survey items “I have a best friend at work” and “My manager cares about me as a person” have been shown to be strongly related to a laundry list of outcomes the average organization would love to realize. Research shows us that when people believe their manager and the organization care about them as people, they are more enthusiastic about the organization and go the extra mile without being asked. Having strong relationships helps buffer people from the effects of stress, not to mention quality relationships are key to getting things accomplished efficiently and effectively.
You don’t have to be a big, bad wolf to drive up engagement and power performance. You can help people meet their needs for security, belonging, esteem, and growth without breaking the bank. The secret sauce isn’t in the perks, it’s in the people. Good companies provide good company in the form of caring managers and connected employees.
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